Law No. 25 of 2007 on Investment

Summary

Law 25/2007 governs domestic investment (PMDN) and foreign investment (PMA) in Indonesia: principles and equal treatment of investors, the form of business entity, business sectors that are open and closed, investors' rights and obligations, investment facilities, and integrated services.

Its best-known rule is that foreign investment must take the form of a limited liability company established under Indonesian law and domiciled in Indonesia. That requirement is the legal origin of the PT PMA, the vehicle a foreign investor uses to run a business in Indonesia. Several articles, including those on closed business sectors, were amended through the Job Creation framework (Law 6/2023). The sector list in Perpres 10/2021 and the OSS guidelines in BKPM (Investment Coordinating Board) Regulation 5/2025, including the LKPM (investment activity report) obligation, build on this Law.

Key points for investors

• Legal basis for the PT PMA and the LKPM (investment activity report) obligation.
• Open and conditional sectors are detailed in Perpres 10/2021 as amended by Perpres 49/2021.
• OSS guidelines and investment facilities: BKPM (Investment Coordinating Board) Regulation 5/2025.

Status & related regulations

Amended by

• UU No. 6 Tahun 2023
• PERPU No. 2 Tahun 2022
• UU No. 11 Tahun 2020

Revokes

• UU No. 12 Tahun 1970
• UU No. 11 Tahun 1970
• UU No. 6 Tahun 1968
• UU No. 1 Tahun 1967

Related at IzinBeres

• PT PMA company registration
• Read in Bahasa Indonesia
• All regulations in the library

Not sure which rules apply to your business?

IzinBeres maps your KBLI, licences and legal basis — and handles the process — since 2014.